Tuesday, September 14, 2010

How Low Can One Stoop

I do not recall which blogger, (apologies to CNBS's Michelle Caruso-Cabrera, I meant idiot blogger), who brought the story earlier this summer regarding Fallen Soldiers' Families Denied Cash As Insurers Profit to my attention. What I do know is the story was disgusting in its entirely. Please click on the link above to read about how these dirt bags, Prudential Financial Inc, treat families of vets and you will wonder no more as to why I hold the views I do regarding the F and I parts of our FIRE (finance, insurance, real estate) economy.

Below is just a snippet from the article;

"Lohman, a public health nurse who helps special-needs children, says she had always believed that her son’s life insurance funds were in a bank insured by the FDIC. That money -- like $28 billion in 1 million death-benefit accounts managed by insurers -- wasn’t actually sitting in a bank.

It was being held in Prudential’s general corporate account, earning investment income for the insurer. Prudential paid survivors like Lohman 1 percent interest in 2008 on their Alliance Accounts, while it earned a 4.8 percent return on its corporate funds, according to regulatory filings.

“I’m shocked,” says Lohman, breaking into tears as she learns how the Alliance Account works. “It’s a betrayal. It saddens me as an American that a company would stoop so low as to make a profit on the death of a soldier. Is there anything lower than that?”

Okay fast forward to today. Karl Denninger over at the Market Ticker brought to my attention today's story carried on the wires that unearths the news that the Veterans Agency Made Secret Deal Over Benefits.

The Bloomberg article outlines that;

The U.S. Department of Veterans Affairs failed to inform 6 million soldiers and their families of an agreement enabling Prudential Financial Inc. to withhold lump-sum payments of life insurance benefits for survivors of fallen service members, according to records made public through a Freedom of Information request.

The amendment to Prudential’s contract is the first document to show how VA officials sanctioned a payment practice that has spurred investigations by lawmakers and regulators. Since 1999, Prudential has used so-called retained-asset accounts, which allow the company to withhold lump-sum payments due to survivors and earn investment income on the money for itself.

You think this is bad. Hang on

The Sept. 1, 2009, amendment to Prudential’s contract with the VA ratified another unpublicized deal that had been struck between the insurer and the government 10 years earlier -- one that was never put into writing, this verbal agreement in 1999 provoked concern among top insurance officials of the agency, the documents released in the FOIA request show.

For a decade, until the contract was formally changed, Prudential wasn’t fulfilling its obligations to survivors of fallen service members, says Brendan Bridgeland, an insurance lawyer who runs the non-profit Center for Insurance Research in Cambridge, Massachusetts.

Wait a minute, a U.S. government agency getting into verbal non-written agreements? Are you kidding me? I am sad to say Ms. Lohman, that there is something lower than that, the U.S agency in charge sanctioned and approved the act.

And then, as if this story could not turn out any worse, we get the obligatory appearance by Sergeant Schultz himself from Hogans Heroes;

U.S. Secretary of Defense Robert Gates -- who was in office when the 2009 agreement was signed -- said when the VA started its probe that he had been unaware that survivors were being sent retained-asset accounts.

“Until today I actually believed that the families of our fallen heroes got a check for the full amount of their benefits,” Gates said at the time. “This came as news to me.”

Just in case you were wondering who runs Prudential Financial Inc., the unit responsible for this absolute travesty, it is one John Strangfeld who was the former Vice Chairman of the company before he replaced the previous Chairman Art Ryan.

Lets see now, maybe Mr. Strangfeld, like Mr. Ryan before him was completely and totally unaware that survivors were being sent retained-asset accounts as well, just like Sergeant Schultz, eeerr excuse me Defence Sec. Gates.

Better yet, maybe he and Prudential can pay a fine while neither admitting nor denying wrongdoing of course.!

Yeah that's the ticket, neither admit nor deny wrongdoing, and keep the loot. Pathetic little maggots.

I urge you to please put aside the fact that Prudential CEO Strangfeld received total compensation of $18.43 million for the year 2009 which was a decline of 15% from the prior year 2008.

Mr. Ryan, Mr. Strangfeld and the board over at Prudential should thank their lucky stars I am not the magistrate they hopefully will be arraigned to sit in front of in a court of law charged with sorting out this total dereliction of duty to put it mildly.

I want to wish survivors of fallen service members, people out there like Ms. Lohman, my families deepest sympathies and the sincere hope that someone in charge will rectify this mess ASAP and also have the onions to deal swiftly and harshly with those responsible for it.

In closing do you remember my piece last month Fredric Mishkin - Corrupt Imbecile?

In it I stated the following;

"Not only are those in charge, lights out stupid, they are in serious positions of policy influence and are on the take everywhere and always. We simply don't stand a chance while thugs like this are at the helm or still being listened to plain and simple."

"None of the "those in charge" group can be trusted. We must purge the entire lot, even if that means some good ones get lumped in with them. (What did Socrates say, oh yeah, silence is acceptance) Cancerous entities must be severed completely and destroyed if the host is to survive."


I am not trying to be Debbie downer here but when the flippin' Secretary of Defence doesn't know vets families are being denied payment, well at some point you have to admit the obvious. You can continue to avoid it or you can examine the evidence and face the facts, as painful, as embarrassing and as insulting as it may be.


Good speculating to you all and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".


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